Federal Support for
Research and Development
Unless otherwise noted, all years are calendar years.
For fiscal year 2007, lawmakers have provided about $137 billion in budget authority to support federal research and development (R&D) activities. In addition, tax preferences are in place to encourage the private sector to increase its R&D spending. (Under one such preference, the research and experimentation tax credit, firms in 2004 claimed $5.6 billion.) This Congressional Budget Office (CBO) study, prepared at the request of the Ranking Member of the Senate Committee on the Budget, examines recent trends in federal support for research and development and the current state of knowledge about the economic effects of that support. In keeping with CBO's mandate to provide objective, impartial analysis, the report contains no recommendations.
Sheila Campbell of CBO's Microeconomic Studies Division wrote the paper under the supervision of Joseph Kile and David Moore. Bob Arnold, Megan Carroll, Juan Contreras, Robert Dennis, J. Michael Gilmore, Pamela Greene, Douglas Hamilton, Arlene Holen, Daniel Hoople, Donald Marron, William Randolph, Philip Webre, and Thomas Woodward, all of CBO, commented on earlier versions of the study, as did Stephen Merrill of the National Academies, David Mowery of the University of California, Berkeley, and Paul Romer of Stanford University. (The assistance of external reviewers implies no responsibility for the final product, which rests solely with CBO.)
Leah Mazade edited the study, and Loretta Lettner proofread it. Angela Z. McCollough produced drafts of the report; Maureen Costantino designed the cover and prepared the study for publication. Lenny Skutnik printed the initial copies, Linda Schimmel coordinated the print distribution, and Simone Thomas prepared the electronic version for CBO's Web site.
Peter R. Orszag
Director
June 2007
Investment in Research and Development by the Private Sector
Research Versus Development
Government Action
Mission-Oriented R&D
Basic and Applied Research
The Research and Experimentation Tax Credit
Deductibility of R&D Expenditures
Figures
S-1. U.S. Spending for Research and Development, by Funding Source
S-2. Federal Outlays for Research and Development, by Discretionary Spending Category
S-3. Federal Spending for Research and Development, by Type of R&D
S-4. Federal R&D Outlays, by Agency, 2004
S-5. Federal Obligations for Research, by Field
1. U.S. Spending for Research and Development, by Funding Source
2. Federal Spending for Defense and Nondefense Research and Development as a Percentage of Corresponding Discretionary Outlays
3. U.S. Research and Development, by Performer
4. U.S. Spending for Research and Development, by Performer and Funding Source
5. U.S. Spending for Research and Development, by Funding Source and Type of R&D
6. Federal Obligations for Research and Development in the Department of Defense and Other Federal Agencies, by Type of R&D, 2004
7. The Federal Science and Technology Budget
8. Domestically Owned U.S. Utility Patent Grants
9. Federally Owned U.S. Utility Patent Grants, 1990 to 2003
10. Federal Spending for Research, by Performer
11. Federal Obligations for Research, by Field
12. R&E Tax Credit Claims and R&D Spending by Industry
Boxes
1. International Research and Development Activity
2. Federal Support for Graduate Students in Science and Engineering
3. Calculating the Tax Credit for Research and Experimentation
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